Kenya revives plans to build first 700MW natural gas-fired power plant

Gas-fired electricity will cost less than Sh10 per kilowatt hour (kWh), or half diesel-generated power, which is currently Kenya’s expensive alternative.

Energy Cabinet Secretary, Charles Keter has opened fresh talks with the Treasury in preparation for a financing plan for power plant based in Dongo Kundu, Mombasa, that the government wants to implement together with a private investor under the public-private partnership model.

Kenya cited the growing demand for power as the reason for the  U turn.

“We are reviving the gas power project plan in light of growing demand, need to diversify our sources and the expected lower consumer prices since gas fired power is cheap,”  said Mr Keter, without offering details on the adjustments they will make to the fresh tender to raise investor appetite this time around.

Apart from the demand, natural gas is also cheaper compared to electricity or diesel generated power.

Gas-fired electricity will cost less than Sh10 per kilowatt hour (kWh), or half diesel-generated power, which is currently Kenya’s expensive alternative whenever drought cuts hydropower production or a geothermal plant is out for repair, according to the CS, a a local business daily reported.

In 2016, the ministry of energy abandoned the plan to set up the liquefied natural gas (LNG) Dongo Kundu plant, which was estimated to cost Sh130 billion ($1.2b)  for fear it would lead to excess supply which would result in expensive electricity bills for homes and businesses.

It instead opted to import liquefied natural gas from Qatar through ships, and has now added LNG-rich Australia to that list.

Mr. Keter’s fresh talks has however been received by lukewarm investor response, with  the tender having received only two bids.

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